Foreign fund managers get mandate to loosen purse strings

Foreign fund managers get mandate to loosen purse strings

New Delhi, May 24: Fund managers who are investing in India from abroad are bullish about the market on the back of a decisive mandate for the Narendra Modi-led alliance. They feel that the BJP-led government will soon start work to deliver on its election promises, which includes boosting infrastructure, simplifying the GST structure and infusing cash into the rural economy to address farmers’ distress.
Over the last few months, several of the foreign portfolio investors (FPIs) were on a ‘wait-and-watch’ mode till the elections results came in. Since it’s a clear mandate for the BJP led alliance that almost guarantees a continuation of the government’s policies, they are expected to infuse money into India — in both debt and equity, market players said.
“Given the clear mandate for the government, we would expect significant increase in foreign fund inflows into the Indian markets in the coming years,” said ICICI Securities ED Ajay Saraf.
Foreign fund managers are happy that Indian voters gave a strong and clear mandate and now they expect there will not be much complexity in the decision-making process. In the global investment landscape, with a 6%-plus annual growth rate, India still is one of the most attractive investment destinations, and the poll mandate is sure to boost FPIs’ confidence in investing here, top officials at institutional broking houses said.
So far in 2019, FPIs have net bought stocks worth Rs 63,642 crore, while they have been net sellers in debt at Rs 20,640 crore, official data showed.
Sukumar Rajah, one of the top emerging market fund managers at Franklin Templeton, wrote that BJP’s win could pave the way for a boost in infrastructure spending. “We expect the BJP to work towards its election promises once the dust settles in New Delhi. Modi’s manifesto included a $1.44-trillion boost to infrastructure, and a $10.5-billion cash injection into the farming industry. He pledged to double farmers’ incomes by 2022, in response to growing anger over low crop prices, which had a detrimental impact,” Rajah, who had spent several years in India managing funds at Franklin Templeton’s operations here, wrote.